Own-Occupation Disability Insurance

No matter what type of disability insurance policy you purchase, the ultimate goal is to provide you with adequate financial security if you’re disabled. After signing up for a policy, the insurance carrier promises to pay you a certain amount every month if you’re unable to work and earn an income due to disability.

If you’re a high-income earner, it is not only essential to purchase own-occupation disability insurance but also crucial that you understand the terms of your policy before you take it up.

One of the primary factors to consider is the fact that the insurance company’s ‘definition of disability’ according to your contract has to be met before you can be eligible for full disability insurance benefits. The answer will determine how your disability affects an own-occupation disability policy.

Own-Occupation Disability Insurance
What Is Own-Occupation Disability Insurance

What Is Own-Occupation Disability Insurance

Own-occupation here is referred to as your regular occupation or profession. It is a type of policy that defines a disability as the inability to carry out your primary occupation for which you’re trained to perform. The insurance policy is subject to the insurer being in employment at the time disability occurs.

Due to its versatility, own-occupation policy allows you to work and earn income in a job other than the original profession you’re trained for while still receiving disability benefits at the same time. Own-occupation policies are generally expensive, but through them you can get the best coverage.

Own-occupation Disability Definitions

The definition of disability as it appears on your policy determines which condition you are eligible to receive disability benefits under. The definition of disability varies from one insurance company to another, and so too does the threshold for claiming benefits.

Consider some common definitions of disability:

Total Disability

Total disability occurs when you’re completely unable to continue working in your present occupation due to an illness or injury. As such, you cannot earn income. This policy allows you to receive monthly benefits until you recover or when your policy expires.

Remember, you can only receive benefits if you include own-occupation in your disability policy. Also, make sure you buy enough coverage that would last for the period you’re disabled. For payments, you’re likely to receive monthly benefits equal your income or about 60% of that income.

Presumptive Disability

Presumptive disability is also known as permanent disability. Under such a circumstance, your insurer presumes you’re unable to recover from a severe illness or injury that caused your disability.

Given the unlikely nature of recovery, the insurance company pays disability benefits without an elimination period. Some cases of presumptive disability include total loss of speech, sight in both eyes, hearing in both ears, both hands or feet or one hand and one foot.

Own-occupation Disability Definitions

Partial Disability

As the name sounds, partial disability is when you develop an injury or illness that isn’t as severe as to keep you totally off your work. You can still work but may be limited to taking up certain responsibilities or reduced pay. The level of disability will be measured by the insurance company to determine your benefits.

Payments will be made whether or not you include own-occupation in your policy.

Own-Occupation Disability Insurance Riders

1.   True own-occupation

True own-occupation is the most popular own-occupation rider considered as the most favorable. You’re eligible to receive full disability benefits if you are unable to perform regular duties in your main occupation due to illness or injury. There is no penalty if you’re gainfully employed elsewhere, even if you’re earning more than your previous occupation.

2.   Transitional own-occupation

This policy applies to a total disability that does not allow you to work in your regular occupation but allows you to be gainfully employed in another profession. The insurer pays full benefits as long as your current job earnings do not exceed the former. Payment is solely based on a disability that results from illness or injury.

3.   Modified own-occupation

Modified own-occupation is when you’re unable to perform the specific occupation you were engaged in at the time you became disabled and are not working in another occupation. If you’re able to secure employment elsewhere, this policy would not cover you as it does not recognize you to be totally disabled. In many cases, the policy allows you to convert to an any occupation rider after 24 months of having modified own-occupation in place.

4.   Any-occupation

With an any-occupation policy, you will be paid disability benefits only if you’re able to perform any occupation other than your original profession if you become totally disabled. Eligibility to perform any occupation is based on your qualifications such as work experience, training, and education while receiving treatment from a doctor.

Why You Should Consider Own-Occupation Disability Insurance

According to the Centers for Disease Control and Prevention (CDC), disability affects more than 61 million adults in the United States. These statistics translate to 1 in 4 (or 26%) of the American population that has some form of disability.

In another study conducted by The National Bureau of Economic Research, data show that a working head of a household can expect to become disabled at some point in his career. And unfortunately, one of the consequences of disability is adverse economic outcomes for the family.

Highly skilled professionals like doctors or physicians will especially find an own-occupation disability policy appealing. With own-occupation disability insurance, you’re ensured of getting covered and securing the financial ability of your family.

Why You Should Consider Own-Occupation Disability Insurance

How Gold Coast Life Insurance Can Help

As a professional, your work helps bring food to the table for you and your loved ones. However, your income depends on your ability to keep working. This makes it your most valuable asset.

Gold Coast Life Insurance will help protect your income in the event of a disability. We provide customized policy designed for each individual’s needs.

It doesn’t matter if you’re high-risk or have a pre-existing condition, we don’t discriminate. Use our free quote to secure your most valuable asset.

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